VA reported $1.1 billion in improper payments in its FY 2013 Performance and Accountability Report (PAR). The OIG’s assessment of VA’s compliance with Improper Payments Elimination and Recovery Act (IPERA) for fiscal year (FY) 2013 is based on FY 2012 data as reported by VA. We conducted this FY 2013 review to determine whether VA complied with the IPERA. We found VA implemented a new risk assessment process in FY 2013 across all of its programs, and met five IPERA requirements for FY 2013 by publishing a PAR, performing risk assessments, publishing improper payment estimates, providing information on corrective action plans, and reporting on its payment recapture efforts. However, VA did not comply with two of seven IPERA requirements for FY 2013. This represents an improvement over FY 2012, when VA was not incompliance with four of the seven IPERA requirements. This year, we identified areas for improvement in both the Veterans Benefits Administration’s (VBA) and Veterans Health Administrations’ (VHA) IPERA reporting. VBA underreported improper payments for its Compensation program. Test procedures for the Compensation program and one Education program also did not include steps needed to identify all types of improper payments. VHA reported a gross improper payment rate of greater than 10 percent for one program and did not meet reduction targets for two programs. We recommended the Under Secretary for Benefits ensure thorough procedures for testing sample items used to estimate improper payment for the Compensation and Post 9/11 G.I. Bill programs. We also recommended the Under Secretary for Health implement the corrective action plan included in the PAR to reduce improper payments for the State Home Per Diem program, and develop achievable reduction targets for that and Beneficiary Travel programs. We will follow up on implementation the proposed action plans during our next annual IPERA review.